L Capital, an affiliate of luxury brand group LVMH, will invest US$50 million in Korean cosmetics company Clio, which aims to go public by the end of this year.
Clio will issue redeemable convertible preference shares to be taken over by the investment company, and an official agreement for this pre-IPO investment will be signed next week.
After almost two decades of mediocre turnover since its establishment in 1997, Clio’s sales surged to 107 billion won ($93.07 million) last year with an operating profit of 22.5 billion won, boosted by an appearance on a popular TV show. Its total market value after IPO is expected to be more than 1 trillion won.
L Capital ventured into the Korean corporate world two years ago by investing 60 billion won in YG Entertainment, becoming the second-largest shareholder of one of the top three entertainment companies in Korea.
Its second choice of Clio reflects the growing demand in Asia, particularly China, for K-beauty products.
Korean cosmetics exports to China alone last year were worth $1.09 billion, double the value of the previous year and coming in second to French cosmetics.
US cosmetics company Estee Lauder last year became a major shareholder of Have and Be, the parent company of Dr Jart, while Goldman Sachs’ private equity fund took over Carver Korea, which owns AHC, for 520 billion won this year.